Seventeen minutes into the Fox Corp. fiscal third quarter conference call, Executive Chairman-CEO Lachlan Murdoch paused to deliver some breaking news: Tom Brady will join Fox Sports as its main NFL commentator once his career as a quarterback ends. “It’s entirely up to him when he decides to retire,” Murdoch said when an analyst asked when the NFL star may make the move to TV.
Murdoch had heralded another growth quarter for Fox Corp., with total revenues up 7% to $3.2 billion. Advertising revenue grew 9% overall to $1.3 billion, led by stronger pricing and higher ratings at Fox News and continued growth at Tubi, the company’s ad-supported streaming service.
“Television delivered a 7% increase in revenue [to $1.8 billion], led by an 8% increase in television affiliate revenue [to $700 million] over the prior year quarter, reflecting increases in both our direct retransmission revenues at our owned and operated stations and for our programming fees from non-owned station affiliates” said CFO Steve Tomsic in detailing the results. That run rate, he said, will take the broadcast operation to its target announced in 2019 of $1 billion in incremental affiliate fees for this calendar year.
“Our television segment also delivered 6% advertising revenue growth [to $969 million], reflecting strong linear pricing at the Fox Network and continued growth in Tubi, partially offset by lower impressions at Fox Entertainment. At Fox Sports, the impact of the additional week of the NFL regular season was offset by the absence of the rotation of the NFL divisional playoff game this year,” the CFO detailed.
“And at the Fox Television Stations, notwithstanding the ongoing supply chain related challenges to the auto category, we continued to grow advertising revenues supported by gains in our digital efforts and continued demand from the sports betting category,” Tomsic said.
Murdoch was upbeat when asked about upfront expectations by Jessica Reif Ehrlich of Bank of America.
“We’re seeing really solid demand across our businesses. In pricing, entertainment seems in the mid-to-high single digits range above last year. But in sports/news — as you said, we’re very well positioned — and we’re seeing pricing up mid-double digits, so the mid-to-high teens pricing rate increases, driven by demand across live sports and live news,” he said.
Murdoch said the Fox Sports-owned USFL is off to a good start in its first season, with games airing on Fox and NBCUniversal platforms.
One analyst noted that Fox is the only NFL broadcaster not running games on its own paid streaming service, since the company doesn’t have such an outlet. So, might Fox consider selling streaming rights to one of its competitors?
“We think that our key rights deserve the ability to stay on our broadcast and cable networks exclusively. This is very important to us. It both gives our league partners the most breadth and reach that they can achieve for their fans, but also it’s really key to our distribution strategy,” Murdoch concluded.
16 May 2024
23 May 2024
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